In June 2020, the EU passed a series of resolutions to officially increase the total amount of the Pandemic Emergency Purchase Programme (PEPP) from 750 billion euros to 1.35 trillion euros. Prior to this, in order to save the national debt market that was in a state of syncope, the European Central Bank (ECB) had invested a splendid package of 2.7 trillion euros in the Asset Purchase Programmes (APP), through the continuous purchase of euro bonds to provide liquidity to the market (A. Viterbo, 2021; M. Kordeva, 2021). After the tireless efforts of the EU and the finance ministries of various countries, the average government debt level (Debt to GDP ratio) of the EU has skyrocketed, reaching 87.7% in the second quarter of 2020 (EuroStat, 2021). This ratio means that the government basically does nothing for the whole year, because the tax collected is just used to pay the debt, which is the perfect example of free labor.
And eurozone member states stand out in particular, with an average government deficit of 95 percent. In Q3 of 2020, the gifted students in Greece scored 199%, followed by Italy with 154.2%, Portugal 130.8%, Cyprus 119.5%, France 116.5%... These shocking figures, Seeing the well-known good baby Germany stunned. Germany's fiscal deficit is relatively conservative, hovering around 70%. So when Germany found out that the EU was still pushing for the PEPP fiscal anniversary, they were completely awakened to the hyperinflationary PTSD of 1923 . According to PEPP's number list purchase plan, as long as it is a sovereign debt ECB with a rating higher than BBB-, it is free to buy it, and even Greek government bonds with a higher risk than Taipei 101 will be collected. For Germany, the ECB's actions completely refreshed their common sense about "safe assets". After the world broke away from the Bretton Wood System and began to use national debt as collateral to issue currency, the only common sense in the financial system was that there was no common sense.
This made Germany start to burst into tears again, hate it, and woohoo, trying to stop the ECB from "destroying the stability of the euro". The German Federal Court launched a fierce attack on the EU's Public Sector Purchase Programmes (PSPP), emphasizing that the PSPP violated the principle of proportionality, and the ECB has overstepped its authority! Seeing the word "inflation" will scare Germany in a cold sweat As a founding member of the Coal and Steel Community, Germany is going to file a lawsuit with the EU. But Germany feels its insistence is justified. According to Article 123(1) of the Treaty on the Functioning of the European Union (Art. 123TFEU.), the ECB's main and only function is theoretically to "maintain exchange rate stability" (see Article 130 of the Treaty on the European Union, Art. . 130 TEU), there should be no direct intervention in the market. Although the ECB does have the authority to provide financial assistance to member states under Article 122(1) TFEU (Art. 122TFEU), this authority is subject to additional conditions.